LiveLawBiz Direct Tax Weekly Round-Up: July 06 - July 12, 2026
Kapil Dhyani
13 July 2026 3:16 PM IST
HIGH COURTS
Gujarat HC
Case Title : Jitendra Shankarlal Mistri v. Income Tax Officer, Ward-1 & Anr.
Case Number : R/Special Civil Application No. 7485 of 2026 (with connected matters)
CITATION : 2026 LLBiz HC(GUJ)87
The Gujarat High Court on 29 June held that a reassessment notice cannot be challenged through a writ petition after reassessment proceedings have culminated in an assessment order. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati dismissed the writ petitions filed by Jitendra Shankarlal Mistri and others, holding that the petitioners could avail the statutory remedy of appeal against the reassessment orders before the Commissioner of Income Tax (Appeals).
Gujarat High Court Quashes Income Tax Reassessment Over Pre-2012 Property Valuation Rule
Case Title : Late Padmaben Zinabhai Trivedi v. Income Tax Officer
Case Number : R/Special Civil Application No. 19363 of 2017
CITATION : 2026 LLBiz HC(GUJ)88
The Gujarat High Court has quashed an income tax reassessment notice issued over the valuation of land sold in 2009. It held that the reassessment in the case was unsustainable because the assessing officer sought to adopt a lower fair market value despite the unamended law governing the assessment. A division bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati held that the amendment made to Section 55A through the Finance Act, 2012 applied only prospectively. It therefore could not govern Assessment Year 2010-11.
Madras HC
Madras High Court Holds Employer Cannot Grant Section 89 Tax Relief Without Form 10E From Employees
Case Title : Hosur Bata Employees Union v. The Principal Chief Commissioner of Income Tax
Case Number : W.P.No.4601 of 2026
CITATION : 2026 LLBiz HC(MAD) 169
The Madras High Court on 24 June held that employers deducting Tax Deducted at Source (TDS) on voluntary retirement compensation cannot be faulted for not granting relief under Section 89 of the Income Tax Act (relief for salary received in arrears or advance) unless employees submit the prescribed Form 10E. Justice C. Saravanan allowed the writ petition filed by the Hosur Bata Employees Union in part and directed the Income Tax Department to process the income tax returns of affected employees and refund any eligible TDS amount, while holding that Bata India Ltd. had acted in accordance with its statutory obligation to deduct tax.
Case Title : Nate Nandha v. Assistant Commissioner of Income Tax
Case Number : W.P.Nos.11340/2023
CITATION : 2026 LLBiz HC(MAD) 170
The Madras High Court has held that Jurisdictional Assessing Officers have the authority to issue reassessment notices under Sections 148A, 148 and 147 of the Income Tax Act, 1961, observing that the retrospective insertion of Section 147A has clarified their jurisdiction to initiate proceedings for income escaping assessment. Justice C. Saravanan dismissed a batch of writ petitions challenging reassessment proceedings initiated by Jurisdictional Assessing Officers, holding that the petitioners had only questioned the officers' jurisdiction and had not challenged the constitutional validity of Section 147A, which could be examined only by a Division Bench.
Madras High Court Quashes Reassessment Based On Material Already Examined During Original Assessment
Case Title : M/s.Schwing Stetter (India) Private Limited v. Additional /Joint/ Deputy/ Assistant Commissioner of Income Tax/ Income Tax Officer
Case Number : WP No. 6230 of 2022
CITATION : 2026 LLBiz HC(MAD) 171
The Madras High Court has recently set aside reassessment proceedings initiated against an engineering equipment manufacturer after finding that the Income Tax Department reopened the assessment based on material that had already been disclosed and examined during the original assessment. Justice Senthilkumar Ramamoorthy observed that the reassessment amounted to an impermissible change of opinion.
ITAT
ITAT Delhi Allows Paper Company's Appeal In Captive Power Transfer Pricing Dispute
Case Title : M/s K.R. Pulp & Papers Ltd. v. ACIT, Central Circle-19, Delhi
Case Number : ITA No. 5741/Del/2024
CITATION : 2026 LLBiz ITAT(DEL) 227
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed an appeal filed by K.R. Pulp & Papers Ltd. against transfer pricing adjustments that had denied the company a tax deduction on profits earned from transferring electricity and steam from its captive power plant to its manufacturing unit. The tribunal held that electricity generated by the company's eligible captive power unit and supplied to its non-eligible manufacturing unit should be valued at the tariff charged by the State electricity distribution company to industrial consumers.
FAR Analysis Mandatory For TP Comparables, Mere “Functional Comparability” Insufficient: ITAT Delhi
Case Title : A. Hartrodt India Private Limited v. DCIT
Case Number : ITA No. 5823/Del/2024
CITATION : 2026 LLBiz ITAT(DEL) 229
On 3 July, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that in transfer pricing analysis, a company cannot be included as a comparable merely on the basis of a general assertion that it is “functionally comparable”, and that a proper Functions, Assets and Risks (FAR) analysis is mandatory before inclusion. Accountant Member Ramit Kochar and Judicial Member Raj Kumar Chauhan partly allowed an appeal by A. Hartrodt India Private Limited for statistical purposes and restored the matter to the Dispute Resolution Panel (DRP) for fresh adjudication.
Case Title : ACIT v. Bonlon Industries Ltd.
Case Number : ITA Nos. 7987, 7988 & 7989/Del/2025 with CO Nos. 5, 6 & 7/Del/2026
CITATION : 2026 LLBiz ITAT(DEL) 228
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the deletion of a ₹9.16 crore addition over alleged bogus purchases after finding that the taxpayer had produced extensive documentary evidence to support the transactions, despite the Revenue relying, among other things, on the retrospective cancellation of the supplier's GST registration. The tribunal also noted that the Assessing Officer had accepted the corresponding sales and had not rejected the books of account before making an ad hoc addition of 12.5% of the purchases.
ITAT Delhi Deletes ₹15 Crore Share Premium Addition, Says AO Cannot Reject Company's DCF Valuation
Case Title : MI Industries (India) Pvt. Ltd. v. DCIT-16(1), New Delhi
Case Number : ITA No. 7051/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 230
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has recently held that an Assessing Officer cannot reject a company's chosen Discounted Cash Flow (DCF) method for valuing shares merely because its actual financial performance differs from projections. Allowing MI Industries (India) Pvt. Ltd.'s appeal in part, the tribunal observed, “We are therefore of the considered view that rejection of DCF method adopted by the assessee by the AO is unwarranted and against the law.”
ITAT Ahmedabad Holds Shell Company Allegation Alone Cannot Justify ₹44.49 Crore Section 68 Addition
Case Title : DCIT v. Jas Infra Space Pvt. Ltd.
Case Number : ITA No. 2070/Ahd/2024
CITATION : 2026 LLBiz ITAT(AHM) 231
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 6 July held that the Income Tax Department cannot treat loans received by a company as unexplained cash credits merely on the basis of allegations that the lender companies are shell entities, when the taxpayer has furnished evidence establishing their identity, financial capacity and genuineness of the transactions. Judicial Member Sanjay Garg and Accountant Member Narendra Prasad Sinha upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)] deleting additions made against Jas Infra Space Pvt. Ltd. under Section 68 of the Income Tax Act (which deals with unexplained cash credits), except for a limited issue concerning interest payments of Rs.12.15 lakh.
Revenue Cannot Disallow Purchases As Bogus After Accepting Corresponding Sales: ITAT Ahmedabad
Case Title : Gopallal Mathurdas Vaishnav v. ITO
Case Number : ITA Nos. 733/Ahd/2026 and 728/Ahd/2026
CITATION : 2026 LLBiz ITAT(AHM) 232
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has recently quashed the reopening of an assessment and deleted an addition of ₹22.47 crore made against a trader in copper scrap and ingots, holding that the Revenue failed to establish that the purchases were bogus despite accepting the corresponding sales. A tribunal comprising Judicial Member Sanjay Garg and Accountant Member Annapurna Gupta observed: "If the assessee has made the sales, it is obvious that he has also made the purchases. It is also not the case of the AO that the assessee had made the purchases in question from some other party or from grey market.The impugned order of the AO and the appellate order of the CIT(A) are not based on any reasonable findings given after appreciation of the evidences furnished by the assessee. Therefore, the impugned additions made/confirmed by the lower authorities are not sustainable, the same are accordingly, ordered to be deleted."
ITAT New Delhi Quashes NIIT Revision, Says Action Was Triggered By Higher Authorities' 'Pressures'
Case Title : NIIT Ltd. v. Commissioner of Income Tax (Central-II), New Delhi (with connected matters)
Case Number : ITA Nos. 2058 to 2063/Del/2010 and ITA No. 4096/Del/2009
CITATION : 2026 LLBiz ITAT(DEL) 233
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 8 July held that revision proceedings under Section 263 of the Income Tax Act cannot be sustained when the Commissioner of Income Tax acts under the pressure of higher authorities instead of independently applying his mind. Judicial Member Satbeer Singh Godara and Accountant Member M. Balaganesh partly allowed NIIT Ltd.'s appeals for Assessment Years 2000-01 to 2005-06 and quashed the revision proceedings initiated against the company. The Bench also dismissed the Revenue's appeal for Assessment Year 2002-03, noting: “We have no hesitation to conclude that the entire revision proceedings under section 263 of the Act had been triggered only based on the dictates / pressures from the higher authorities and not based on any independent application of mind by the Learned CIT in the manner known to law.”
ITAT Delhi Deletes ₹13.97 Crore TP Adjustment Against Coca-Cola India Over Delayed Receivables
Case Title : DCIT, International Taxation v. Coca Cola India Inc.
Case Number : ITA No. 8275/Del/2018 with CO No. 73/Del/2020
CITATION : 2026 LLBiz ITAT(DEL) 235
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has recently held that Coca Cola India Inc.'s Indian branch cannot be subjected to a transfer pricing adjustment over delayed recovery of receivables from its Associated Enterprises (AEs) where it had no borrowings and its working capital requirements were entirely funded by its US head office. A bench of Judicial Member Vimal Kumar and Accountant Member S. Rifaur Rahman partly allowed the Revenue's appeal only on the issue of interest under the Income Tax Act.
Section 263 Assessment Cannot Survive After Original Order Is Quashed As Time Barred: ITAT Kolkata
Case Title : JCIT (In-Situ), Circle-1(1), Kolkata v. Dozco India Private Limited and Cross Objection
Case Number : ITA No. 1018/KOL/2026 and C.O. No. 37/KOL/2026
CITATION : 2026 LLBiz ITAT(KOL) 234
On 8 July, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that a fresh assessment order passed pursuant to revision proceedings cannot survive once the original assessment has been quashed as time barred. It becomes “invalid and void ab initio” since the original assessment no longer exists in law. Judicial Member Pradip Kumar Choubey and Accountant Member Rajesh Kumar allowed the cross objection filed by Dozco India Private Limited and dismissed the Revenue's appeal as infructuous.
Case Title : OPC Asset Solutions Pvt. Ltd. v. The Joint Commissioner of Income-tax (OSD)
Case Number : ITA No. 2230/Chny/2026
CITATION : 2026 LLBiz ITAT(CHE) 236
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 6 July held that discounting charges arising from the assignment of future rent receivables on a non-recourse basis cannot be treated as interest under the Income-tax Act, 1961, and therefore do not attract tax deduction at source (TDS) under Section 194A (which requires deduction of tax on interest other than interest on securities). A Single Member Bench comprising Judicial Member R. Muralidhar allowed seven appeals filed by OPC Asset Solutions Pvt. Ltd. and set aside the orders passed by the Assessing Officer and the Commissioner of Income Tax (Appeals), which had treated the discount retained by financiers as interest liable for TDS deduction.
AO Cannot Grant Fresh Opportunity To Extend Reassessment Notice Deadline: ITAT Ahmedabad
Case Title : Scarlet Tradelink Private Limited v. Income Tax Officer, Ward 4(1)(1), Ahmedabad
Case Number : ITA No. 869/AHD/2025
CITATION : 2026 LLBiz ITAT(AHM) 237
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 7 July held that a reassessment notice issued after the expiry of the prescribed “surviving period” under the Income Tax Act, 1961 is barred by limitation. Economics Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary allowed the appeal filed by Scarlet Tradelink Private Limited against the order of the National Faceless Appeal Centre for Assessment Year 2016-17 and quashed the reassessment proceedings.
ITAT Ahmedabad Upholds Rejection Of Tax Deduction Claim On ₹12 Lakh Donation To Political Party
Case Title : Prasana Jayantkumar Bhatt v. Dy. Commissioner of Income-tax
Case Number : ITA No. 426/Ahd/2026
CITATION : 2026 LLBiz ITAT(AHM) 238
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the denial of a tax deduction claimed by a salaried taxpayer on a ₹12 lakh donation made to a political party, holding that he failed to establish that the contribution was genuine and eligible for deduction. A division bench of Vice-President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary observed, "the assessee has failed to establish that the impugned contribution represented a genuine donation eligible for deduction under section 80GGC of the Act."
ITAT Delhi Quashes Reassessment After AO Failed To Decide Objections Before Proceeding
Case Title : Meramandali Finvest Ltd. v. Income Tax Officer, Ward-17(1), New Delhi
Case Number : ITA No. 7258/Del/2025
CITATION : 2026 LLBiz ITAT(DEL) 239
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has recently quashed a reassessment against Meramandali Finvest Ltd., holding that the Assessing Officer was required to dispose of the assessee's objections to the reopening by passing a separate speaking order before proceeding with the reassessment. A bench of Judicial Member Satbeer Singh Godara and Accountant Member Naveen Chandra observed: "It is now settled law by a series of judicial precedents that the failure of the Assessing Officer to dispose of objections filed by the assessee against the reopening notice by passing a speaking order, becomes fatal to the assumption of jurisdiction under Section 147 and renders any reassessment order passed thereafter null and void."
ITAT Chennai Upholds Deletion Of Unexplained Money Addition Against Forex Commission Agent
Case Title : The Income Tax Officer v. Shri Jaisingh Shankar
Case Number : ITA No.: 2931/CHNY/2025
CITATION : 2026 LLBiz ITAT(CHE) 240
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the deletion of an addition of ₹3.44 crore made against an individual who worked as a commission agent for foreign exchange companies. It held that cash withdrawn from the agent's own bank account for disbursal to customers could not be treated as unexplained money under Section 69A of the Income Tax Act, which addresses unexplained assets. The case involved an individual who acted as an authorised sub-agent for Transcorp International Ltd. and Muthoot Forex Ltd.
Late Corrigendum To Final Assessment Order Cannot Cure Failure To Follow DRP Directions: ITAT Delhi
Case Title : Syniverse Technologies Services India Pvt. Ltd. v. ACIT, Circle 3(1), Gurgaon
Case Number : ITA No. 2056/Del/2022
CITATION : 2026 LLBiz ITAT(DEL) 241
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed an assessment order passed against an Indian subsidiary of a foreign technology company. The tribunal held that the Assessing Officer could not rectify the failure to give effect to the Dispute Resolution Panel's (DRP) directions by issuing a corrigendum after the statutory time limit had expired. A bench of Judicial Member Raj Kumar Chauhan and Accountant Member S. Rifaur Rahman observed that the final assessment order, passed without incorporating the DRP's directions, was unsustainable.